Amazon Web Services CEO Andrew Jassy has poured cold water on the suggestion that AWS should be spun out from the mother ship, suggesting to media at the company’s re:invest conference in Las Vegas today that the need simply doesn’t exist.
He told assembled journalists, “I’ve been at Amazon for 20 years and I’ve learned in that time to never to say never. But I would be very surprised if we spun out AWS because there is simply no need to do so.”
He said businesses usually spin units for two reasons. Firstly, because they can’t commit enough capital to the business unit so they do an IPO to raise money. “Or else, it is because they don’t want the financial statement of one of those businesses as part of the overall set of the financial statement.”
Neither applied in the case of AWS, he suggested.
“If you look at the history of the company we are not focused on the objects of the financial statement. We are comfortable being misunderstood for long periods of a time so its not a driver for how we behave,” he said.
“And the company has been so gracious committing whatever amounts of capital we needed to grow AWS – and its required a lot of capital so – there hasn’t been the need to do so.”
He also suggested that there is a lot of value for us in AWS in remaining inside Amazon. “We have so many Amazon internal customers who are not shy about telling us what they think about what we are doing.”
“I don’t see it being likely,” said Jassy.
Asked about the growth at AWS he said the company was on its way to $20 billion revenues. Its run rate is already $18 billion and its growing at 42 per cent.
However, he said that growth was likely to be lumpy. Corporates and governments, in particular, tended to take a while to move and preferred to build sequential plans to move workloads across to the cloud over a few years.